Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine!

Hernan Bejarano, Brice Corgnet and Joaquín Gómez-Miñambres ()
Additional contact information
Joaquín Gómez-Miñambres: Lafayette College, Department of Economics, 730 High Street, Easton, PA 18042. Chapman University, Economic Science Institute. One University Drive, Orange, California 92866

No 1929, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: We extend Akerlof’s (1982) gift-exchange model to the case in which reference wages respond to changes in the work environment such as those related to unemployment benefits or workers’ productivity levels. Our model shows that these changes spur disagreements between workers and employers regarding the value of the reference wage. These disagreements tend to weaken the gift-exchange relationship thus reducing production levels and wages. We find support for these predictions in a controlled, yet realistic, workplace environment. Our work also sheds light on several stylized facts regarding employment relationships such as the increased intensity of labor conflicts when economic conditions are unstable.

Keywords: Gift-exchange; incentives; self-serving biases; reference-dependent utility; laboratory experiments; labor conflicts (search for similar items in EconPapers)
JEL-codes: C92 D23 M54 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-hrm, nep-ltv and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
ftp://ftp.gate.cnrs.fr/RePEc/2019/1929.pdf (application/pdf)

Related works:
Working Paper: Labor contracts, gift-exchange and reference wages: Your gift need not be mine (2021)
Working Paper: Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine! (2019)
Working Paper: Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine! (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:1929

Access Statistics for this paper

More papers in Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon Contact information at EDIRC.
Bibliographic data for series maintained by Nelly Wirth ( this e-mail address is bad, please contact ).